Her $1,900 Annuity Check Arrives Every Month.
Because It Never Gets a Raise, It Buys 25% Less by 80
Quick Read – A fixed annuity guarantees the dollar amount, not purchasing power. With PCE inflation at 3.7%, a $1,900 check buys meaningfully less each decade. – Social Security’s annual COLA, tracking 3.1% for 2027, preserves purchasing power over time in a way fixed private annuities fundamentally cannot. – Retirees can fight inflation erosion by adding a COLA rider, laddering annuity purchases across ages, or keeping part of the portfolio invested outside the contract. – Learn 7 ways to generate income with a $1,000,000+ portfolio (sponsor) A $1,900 monthly annuity check that lands on the first of every month solves one problem exceptionally well. You cannot outlive it.
That is really the case for annuitization in a single sentence, and it is exactly why insurers can market these contracts as guaranteed for life. But here is the catch. That guarantee covers the nominal dollar amount, not what it can buy.